In the news today, we are seeing more and more verdicts amounting to hundreds of thousands of dollars or even millions awarded by juries across the country. A large judgment against you can easily wipe out your assets and put your future earnings in jeopardy.
You can minimize this risk by adding a personal umbrella policy to your existing insurance portfolio. A personal umbrella policy can be very affordable coverage and protect you against claims that exceed the liability limits of your home, auto, boat and other personal policies. A typical personal umbrella policy provides coverage for claims of personal injury or property damage caused by you, your family or hazards on your property, auto-related liabilities, non-business related personal injury claims such as slander, libel or false arrest, legal defense costs and much more.
We sat down with Jan Summerfield, Personal Lines CSA to discuss who needs umbrella insurance, what exactly it is and how it can help you.
Q. What Is Umbrella Insurance?
A. Umbrella insurance, or personal excess liability insurance, is a type of liability over and above your auto or home insurance policy. It is an inexpensive way to protect your financial future and current assets; umbrella insurance gives you added liability protection for lawsuits and claims that you are held responsible for and protects you when your base policy liability limit is not enough to cover the damages or bodily injury.
Q. Who Can Benefit from An Umbrella Policy?
A. Everyone can benefit from the additional coverage because in the blink of an eye a multi-million-dollar lawsuit could jeopardize everything you’ve worked for. Here are some more specific examples:
- Individuals who are of substantial worth, work in a profession that allow them to accumulate a lot of wealth or are at risk of lawsuits. Essentially, the more likely you are to be sued the more likely you’ll need an Umbrella Policy.
- The more exposure you have (hunting land, recreational toys, boats, etc.), the more you need an umbrella policy. It is important to note all these items must have underlying primary coverage in order to add an umbrella policy.
- If you travel overseas I would also recommend purchasing an umbrella policy. For example, your auto policy may not cover you while driving in a foreign country, but your umbrella policy will.
Q. When Does an Umbrella Policy Kick In?
A. An Umbrella Policy kicks in when you’ve maxed out your underlying auto or home liability coverage.
Q. How Much Does Umbrella Insurance Cost?
A. Umbrella Insurance is very affordable. $1M in coverage usually costs $200-300/year.
Q. How Do Clients Determine How Much They Need?
A. The following are important questions to ask yourself when determining how much coverage you’ll need:
- Do you travel outside of the United States?
- How much are your assets?
- What’s your net worth?
- What risks do you think you might face?
Are you in a profession that makes you a target for lawsuits?
Q. How Much Coverage Does Umbrella Insurance Come With?
A. Umbrella insurance offers coverage in a variety of limits. We typically sell $2-4M in coverage, but lower and higher limits of coverage are available.
Q. What Are the Conditions of an Umbrella Policy?
A. The most important thing to remember is that you have to have a certain amount of underlying liability coverage to meet specific company requirements to be eligible for umbrella coverage. Beyond that stipulation, the remaining conditions vary from carrier to carrier. As an independent agency, Allegheny Insurance can comparatively shop a variety of carriers to find the coverage that best suits your individual risks.
Q. Can You Give an Example of How an Umbrella Liability Policy Might Work?
A. An example that I remember was a client driving in downtown Baltimore. A child ran out in front of her car to get a ball and she accidentally hit him. The child was a paraplegic the rest of his life. Her underlying limits were reached, and the underlying policy paid the limits of liability. The main purpose of your umbrella policy is to protect your assets from this kind of unforeseen tragic accident where you are held responsible for damages or personal injury.
Q. What Information is Needed to Get Umbrella Insurance?
A. We need to review your existing insurance policies unless we have you insured already, then you just need to make an appointment
Connect with me today to customize your Umbrella Policy: